Notable Mergers and Acquisitions of the Day 09/20: (XOM)/(DNR) (WTI)/(NFX) (VCLK)

• Denbury Resources Inc. (NYSE: DNR) entered into an agreement to sell its Bakken assets in North Dakota and Montana to Exxon Mobil Corporation and its wholly owned subsidiary XTO Energy Inc. (NYSE: XOM). Denbury will receive $1.6 billion in cash, subject to closing adjustments, and ExxonMobil's operating interests in Webster Field in Texas and Hartzog Draw Field in Wyoming, both of which are ideal candidates for carbon dioxide flooding and close to Denbury's existing or planned CO2 pipelines. In addition, Denbury has agreed in principle to either purchase an interest in the CO2 reserves in ExxonMobil's LaBarge Field in southwestern Wyoming or purchase incremental CO2 from that field, on terms and conditions to be mutually agreed upon by the parties. The purchase of an interest in CO2 reserves would reduce the amount of cash received by Denbury.
  
  The transactions are subject to satisfactory completion of customary title and environmental due diligence, as well as the satisfaction of customary closing conditions and, in the case of the LaBarge Field CO2 transaction, the entering into of definitive agreements. The transactions are expected to close late in the fourth quarter of 2012 with a July 1, 2012 effective date. The sale price is subject to standard adjustments for revenues and costs of the respective assets from the effective date to the closing date.
  
  
  Denbury intends to use the cash proceeds from the transaction to pursue the purchase of additional oil fields in the Gulf Coast or Rocky Mountain regions that are suited for CO2 flooding, to fund capital expenditures, and/or to repay outstanding debt under its bank credit facility. Additionally, Denbury plans to resume its stock repurchase program begun in October 2011 under which $195 million of the $500 million of authorized repurchases have been made. Assuming no additional assets are acquired with the cash proceeds in a manner that would qualify for like-kind exchange treatment for federal income tax purposes, Denbury estimates that its after-tax cash proceeds from the transaction (without giving effect to closing adjustments) will be approximately $1.1 billion.
  
  Proved reserves attributed to Denbury's Bakken assets being sold were approximately 96 million barrels of oil equivalent as of December 31, 2011 and were 84% oil and natural gas liquids and 26% proved developed producing. Average production from the properties in the first half of 2012 was about 15,400 barrels of oil equivalent per day ("BOE/d"), of which 88% was oil and natural gas liquids. Denbury's previously issued 2012 annual production guidance assumed average daily production from the Bakken properties of between 14,350 BOE/d and 16,350 BOE/d.
  
  
• After markets closed Wednesday, W&T Offshore, Inc. (NYSE: WTI) said it entered into an agreement with Newfield Exploration Company (NYSE: NFX) and its subsidiary, Newfield Exploration Gulf Coast LLC to acquire all of Newfield's exploration and production properties in the Gulf of Mexico. The transaction includes 78 federal offshore lease blocks on approximately 432,700 gross acres. There are 65 blocks in the deepwater, six of which are producing; 10 blocks on the conventional shelf, four of which are producing; and an overriding royalty interest in three deepwater blocks, two of which are producing. Total undeveloped acreage is approximately 312,000 gross acres, 91% of which is in deepwater. The purchase price is $228 million (subject to customary effective date adjustments) and the assumption of future asset retirement obligations. The effective date of the transaction is July 1, 2012. The transaction is estimated to close on or around October 1, 2012. The acquisition will be funded from W&T's available cash on hand and revolving credit facility.
  
  Total proved and probable reserves are 7.7 million barrels of oil equivalent (MMBoe) and 1.2 MMBoe, respectively, per third-party engineers. During July, average production from these properties was approximately 8,350 Boe per day net, of which 37% is oil and approximately 75% is from the deepwater. W&T will take over operations of approximately 90% of the production.
  
  The producing deepwater blocks are in the Garden Banks, Mississippi Canyon and Viosca Knoll areas. In addition to the production in those deepwater blocks, there is exploration potential in each of those areas, as well as in the Green Canyon and Atwater Valley areas. The producing conventional shelf leases are in Ship Shoal, West Cameron, Vermillion, and West Delta.
  
  
• ValueClick, Inc. (Nasdaq: VCLK) today announced the divestiture of Search123, its self-service paid search business operating in Europe.
  
  The Company is selling Search123 to Carl White, the former executive in charge of the Company’s European operations. The terms of the transaction, which are not material to the Company’s financial position, consist of future contingent payments based upon the performance of the business over the next four years. In accordance with applicable accounting standards, ValueClick anticipates presenting the Search123 business as a discontinued operation and restating the Company’s historical financial statements and segment operating results to reflect this change. The transaction is expected to close by the end of September.
  
  Search123 generated revenue of $31.4 million in fiscal year 2011 with the first, second, third, and fourth quarters contributing revenue of $7.7 million, $8.5 million, $8.1 million, and $7.1 million, respectively. In the first two quarters of 2012, Search123 generated revenue of $6.4 million and $7.0 million, respectively, representing approximately four percent of the Company’s total consolidated revenue in each period.

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